Risk warning: Trading CFDs is risky and can result in the loss of your invested capital. Please ensure that you understand the risks involved and do not invest more than you can afford to lose. Read full Risk Disclosure. ForexTime Ltd is regulated by CySEC under license No. 185/12.
Risk warning: Your capital is at risk. We cover you with negative balance protection.
Your capital is at risk. We cover you with negative balance protection.

CFDs on Commodities

What are CFDs?

A Contract for Difference (CFD) is an agreement made between the buyer and the seller of a specified asset. This agreement states that the seller will pay the buyer the difference in price between the asset’s value at the time the agreement was made and the asset’s value at present.

CFD trading is one of the most popular options for traders because you’re trading on price movements of an asset, without actually having to buy it.

Why trade CFDs on Commodities?

CFDs offers you easier access to the commodities markets. As a result, trading on the price movements of heavily-traded assets, provides you with flexible trading opportunities that have great potential to boost your investment portfolio.

With FXTM, you can choose to trade the following three CFD commodities:

  • UK Brent (Spot)
  • US Crude (Spot)
  • US Natural Gas (Spot)

Low Costs

Trading CFDs on Commodities costs far less than trading the underlying asset directly, while still offering the same probability for higher gains. If a trader goes long with a CFD, when the commodity appreciates in value, they could potentially make a bigger profit than someone who owns the physical asset. This cuts both ways, though, as this same trader could incur a greater loss if the price of the commodity drops.

Leverage

Traders find CFDs attractive because they offer an economical way of participating in the financial markets. With leverage, traders invest a smaller portion of their own capital when entering into the agreement, which opens the doors for potentially bigger returns. That said, it’s important to remember that leverage carries the same potential to increase losses as it does to boost profits.

Fast Execution Speeds

Our CFD commodities are tradable with both instant and market execution, guaranteeing you fast and efficient trading.

Things to consider when trading CFDs on Commodities:

  • Whether you go short or go long, the same rules and margin requirements apply when trading CFDs.
  • The margin requirements for CFDs are significantly lower than they are for the underlying asset. Click here for our contract specification details on CFDs.
  • Since you can take both short and long positions with CFDs, a falling market retains the same risks when it comes to incurring losses but it can also offer potential profit-taking opportunities.
  • The benefits of CFD trading is clear, but always remember that all leveraged assets have similar levels of associated risks and CFDs are no different.